Darkstrand opens a high-speed artery between corporations and researchers

The Internet was invented for researchers. But today, Internet data transfer speeds are too low for many types of scientific collaboration. So researchers have built their own, smaller networks, operating outside of the Internet, one of which a company called Darkstrand just bought into for a new startup idea.

With ownership of half of the 10 gigabit per second National LambdaRail (NLR), Darkstrand will open communication between large corporations with research needs and institutions like the Argonne and Sandia National Laboratories, which are non-profits who nevertheless have mandates to do commercialize their work.

The NLR connects about 30 cities, on the way touching a number of research locations and universities. Corporations that need help with internal research — development of a new drug, for example — can ask for outside help, but would have to be connected to the network to send and receive data.

Darkstrand has agreed to pay about $24 million for its stake in the NLR itself, but will also have to build out the “last mile” network to connect companies to the network. Once it does that, the company plans to act as a middle-man, helping to create the agreements that will get the research done.

Some examples of this already exist. The movie studio Pixar, for example, uses the Oak Ridge National Lab to help with algorithms for animated movies. And Caterpillar is sending its vehicle designs in for stress analysis that only researchers are easily capable of, at the moment.

Darkstrand’s CEO, Michael Stein, says his company won the bidding process for the NLR stake against big telecommunication companies despite the fact Darkstrand couldn’t offer as much money. However, the research groups who owned the network were more interested in commercial collaborations than seeing the network’s bandwidth sold off to any bidder who came along.

Now it’s up to Darkstrand to make a profit from its activities. Once it connects companies to the network, it will sign 15 year agreements with them for a yearly fee, and potential transition to unheard of 40GB and 100GB network upgrades coming in the next few years. Individual projects farmed out to researchers will then be billed depending on their complexity.

Most of the company’s money so far has come from company executives who see the worth of the arrangement. Darkstrand has raised almost $12 million from individuals to date, and plans to pick up another $25 million in a second round of funding. The company is based in Chicago.

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